Carvana, the innovative online used-car retailer, finds itself at a pivotal juncture as its stock experiences a notable decline amidst a backdrop of strategic expansion and relentless scrutiny from short sellers. The company's recent advancements in delivery services are being overshadowed by serious accusations of financial impropriety, casting a long shadow over its market performance.
Carvana Faces Headwinds: Stock Decline, Delivery Expansion, and Short Seller Accusations
On a recent Wednesday, the trading floor witnessed a notable dip in Carvana Co. (NYSE: CVNA) shares. This downturn occurred amidst a complex operational landscape for the online used-car giant, characterized by both ambitious service enhancements and persistent challenges. The company, a prominent player in the digital automotive retail space, has been striving to bolster its market position through strategic service rollouts while simultaneously fending off allegations from short sellers.
A key development in Carvana's operational strategy emerged on February 3, 2026, when the company officially announced the expansion of its expedited vehicle delivery options. This initiative brought same-day delivery services to the Eugene metropolitan area in Oregon, extending a convenience previously enjoyed by customers in other regions. Carvana’s spokesperson, Hearns, highlighted the company’s robust logistics network as the driving force behind this rapid delivery capability, enabling customers to receive their vehicles mere hours after finalizing their purchases. This expansion signifies Carvana's continued commitment to enhancing customer experience and logistical efficiency, building upon its initial success in Arizona and now spanning over 20 states.
However, Carvana's forward momentum is being significantly hampered by ongoing allegations from short sellers. Notably, Gotham City Research has leveled accusations against the company, asserting that Carvana inflated its earnings figures across multiple reporting periods. Reports from late January 2026 detailed these claims, suggesting that the company overstated profits by more than $1 billion during 2023 and 2024. In response to these serious allegations, Carvana issued a definitive statement via email, unequivocally dismissing the report as both “inaccurate and intentionally misleading.” This rebuttal underscores the contentious nature of the current environment surrounding the company.
From a technical analysis standpoint, Carvana's stock performance presented a mixed picture. While it traded approximately 7.9% below its 20-day simple moving average (SMA), indicating short-term bearish pressure, it remained 2.5% above its 100-day SMA, suggesting a degree of underlying long-term resilience. Over the preceding 12 months, the shares had appreciated by 44.46%, positioning them closer to their 52-week highs than lows, which generally signals a positive long-term trajectory. The Relative Strength Index (RSI) stood at 41.74, residing in neutral territory, while the Moving Average Convergence Divergence (MACD) was observed below its signal line, reinforcing the presence of bearish momentum. This combination of indicators painted a picture of conflicting forces at play in the market.
Investors are now keenly awaiting Carvana’s next earnings report, scheduled for February 18, 2026. Projections include an estimated Earnings Per Share (EPS) of $1.11, a significant increase from 56 cents year-over-year, and a projected revenue of $5.23 billion, up from $3.55 billion in the prior year. Despite these optimistic financial forecasts, the company's valuation, with a Price-to-Earnings (P/E) ratio of 89.0x, suggests a premium valuation. Analyst consensus leans towards a “Buy” rating, with an average price forecast of $451.83. Recent analyst actions include JP Morgan raising its target to $510.00 on January 28, Wells Fargo increasing its target to $525.00 on January 27, and Barclays elevating its target to $530.00 on January 21, all maintaining an “Overweight” rating.
Benzinga Edge’s scorecard further illuminates Carvana's market standing, highlighting weaknesses in value (Score: 11.49) due to its premium valuation, but demonstrating bullish sentiment in growth (Score: 98.3) and momentum (Score: 80.31), indicating strong growth potential and market outperformance. At the time of publication on Wednesday, Carvana shares experienced a 5.65% decline, trading at $369.56, reflecting the immediate market reaction to the confluence of these factors.
This ongoing saga highlights the delicate balance companies must maintain between aggressive market expansion and transparent financial practices. Carvana's journey reflects the inherent risks and rewards in the fast-paced online retail sector, where innovation must continually contend with intense market scrutiny and investor sentiment.